Harout Semerjian, and we have Joseph Eid, who heads up the R&D effort of the company. We're just going to have kind of a casual discussion. If anyone has a question, feel free to raise your hand. We'll get you acknowledged and hopefully get your question answered. Harout, Joseph, thanks so much for coming today, and any opening comments you'd like to make before we jump into Q&A?
Well, thank you, Steve, and thank you to Stifel for the opportunity to present our story. Our story continues to emerge as a commercial company. Last week, we have reported our fourth quarter of back-to-back growth. We're quite excited that our net revenue has now cracked the $60 million for the quarter, so that's an internal milestone we were very happy to see, all while being financially disciplined as well as we execute on our plan and make sure that we set up ourselves not just for short-term growth, but also long-term growth. So, from that side, Steve, our U.S. business is on a very good trajectory, stabilized in terms of growth. We've demonstrated account growth. We've demonstrated the right patients mix. I'm sure we're going to get into that. Overall, that's good.
On top of that, we've also given some additional color in terms of how we're thinking and executing on our ex-U.S. strategy, starting with Germany as well. Overall, healthy growth, and I'm sure we're going to get into that.
Okay. Maybe we can just jump right into RYTELO and focus on lower-risk MDS specifically. I know you've been in this seat now for what, 12 or 15 months or so. Where do you think you've made the most commercial progress, and where do you think there's still significant improvements to be made? I guess, what are the strategies right now that you're emphasizing in an effort to try to drive uptake?
Yeah. No, I have been in the role since August 2025.
Okay.
I mean, if you think about the arc of our strategy, in the beginning, it was really about what would it take for us to grow RYTELO in the U.S.? That was really our first focus area, and we had to start from a point where we actually simplified our operations in the U.S., and that resulted in the RIF that we had announced in December 2025. Since then, we have not really missed a beat in terms of going rapidly for a reset in our way of how we actually engage with the marketplace, starting with our academic medical centers, but really keeping an eye on the ball on the community-based physicians, because 80% of low-risk MDS continues to be treated in the community. This is the disease of the elderly and of the community.
When we really engage with the academic medical centers, given that in the U.S., we did not really have a lot of advocates, they were not part of the IMerge program, and so we really expanded our ability to engage with that medical expert population. Now with our more revised strategy in the community, focusing on the high-volume accounts, focusing on a simplified message, really focused on the second-line patient population, we are very happy to say that in the last couple of quarters, we have been reporting now that predominantly our growth is coming from the community. I think that transition from first resetting the company in a way that it makes it very actionable, to the academic medical centers, the engagement in the U.S., which happened now after the launch, but it did happen.
Third, really making sure that we are shifting towards the community and how we engage with them. I think that is kind of what is really fueling our growth, and we were able to demonstrate that over the last four quarters now, b ack to back, with not just the top-line growth, demand growth, expansion of the number of accounts ordering RYTELO, and then the patient population that's coming from first line, second line, rather than just the late-line patients, which we were getting in the beginning.
Okay. I know sales are kind of ultimately the barometer of progress here. But what are some of the kind of the key commercialization metrics that you're focusing on internally in an effort to really kind of gauge how some of these strategic initiatives and messaging has been resonating with prescribers?
Yeah. I mean, sales obviously is the ultimate barometer, but it's a lagging indicator in some ways, right? That's why we gave additional color in terms of where that's coming from. Starting from saying that predominantly our growth is coming from the community, that's an important area in our opinion, because it is an indicator that 80% of the patient population that is in the community, we're making headways around that. That's why we have qualitatively as well mentioned this year or in the last quarter that we see RYTELO grow for many years to come, because of the fact that we're able to now make inroads on the community setting. That's one. Then the second is, well, how much is our expansion of accounts that are ordering RYTELO?
Now we've reached 1,700 accounts, which is a very important aspect because every quarter, we're growing another, call it 100 to 200 accounts, new accounts that have never ordered RYTELO before and now are ordering RYTELO. It doesn't mean every account, 1,700, are all active all the time. It just means that that pool is continuously expanding over time, which is really great. Then the third one is, which type of patients are we getting? In oncology, hematology, as you know, Steve, a lot of the first wave of patients you get are really the tough-to-treat patient populations. Patients who've been on multiple different therapies, haven't really been able to get benefit or relapsed after a while, and now physicians are trying them on this new kid on the block. That happens in the beginning, but you can't really bet on that.
You really want to see the business move into the indications that we're approved on, which is in the second-line patient population. That's why one of the early indicators as well that we give is how much of our business is coming from that first line, second line, and that number has continuously increased. Currently, it stands at 36%, so more than one-third of our patient population is coming from that first line, second line, and that has been growing 1%-2% point every quarter w ith a 12-month look-back KPI.
Okay. With respect to that growth that you're seeing in utilization within the front and second-line settings, specifically, where do you think this number can trend to over the next 12 to 24 months? Do you have any sense of the duration of therapy delta that you're able to capture on a per-patient basis by shifting use from third line plus to that first and second-line setting?
Yeah, maybe I'll add some thoughts on that, and then Joe, maybe you can add on the real-world evidence as well. I mean, in a perfect world, all our patients should be coming in a second-line setting, right? Because that's kind of where our indication is. Unfortunately, that's not how real world works. We don't see it for us, we don't see it for luspatercept or anything else as well. However, what we do see is there's a significant opportunity. In our estimates, there are about 8,000 patients in the U.S. who can benefit from RYTELO in the second-line setting-
-only, and we are far from that number, which gives you a sense of the opportunity that we see in hand, quarter-over-quarter growth, especially now that we are making inroads in the community setting. The more we get second-line patients, what we are seeing is the duration of response, mimicking more and more the IMerge trial patients, which were around that 7.8 to 8-month period. Obviously, the first cohort of patients we got were in the later-line patients, which typically are shorter than that ei ght months. We also had recently some real-world evidence as well. Joe, if you want to expand on that.
Yeah, I mean, we had two publications in the summer and the fall, showing that in the real-world evidence, especially post-launch, the patients were more advanced and sicker, yet in terms of duration on therapy, they mimic in a lot of ways the IMerge study, despite being a sicker population. Maybe part of your question, Stephen, is also the fact that the dynamic in the field of MDS is also evolving to luspatercept moving into first line, and that is pushing ESA from that first-line spot, knowing also that post- luspatercept , your serum EPO increases to the point of becoming resistant to ESA. So that creates also more space for imetelstat to grow into that second-line business, given that the HMAs now, according to practice as well as NCCN guideline, is positioned behind imetelstat.
Okay. Maybe just going back to the kind of account question, the 1,700 accounts. How does growth in that number attribute out, like over the last, say, like three, six months, right? So if I wanted to kind of understand demand growth as a function of either breadth, i.e. account expansion, or depth, more prescribing within the accounts that you have penetrated, how would that demand growth attribute out between breadth and depth?
Yeah, I mean, it's going to be a combination of both for some time. I mean, that's kind of where I know the data junkies would like to identify every single one of them by itself. On the short term, it really doesn't matter. You need both to grow, and that's going to be part of our consistency of growth, is in the beginning, we're going to take it from breadth and depth, whichever comes, that's great. What is important is that that physician ends up identifying the right patient, who is the second-line patient, and puts them on RYTELO, identifies what are they going to see, understand how to manage cytopenia.
Cytopenia is something that pretty much every hematologist knows how to manage, as long as they know that that's what they need to anticipate in the first cycle or the second cycle, and then how to go through it, why it's worth it. The data at ASH, last ASH, we've shown that this is an on-target effect, and really make sure that they're helping the patient get there, because once they do that, then they're going to be seeing that long-term durable responses that we've seen in IMerge.
Without that, they're going to see the side effect first without seeing the efficacy. What we want to do is make sure that we're managing the patient so they get to see the efficacy. Because the whole point is, once they see the efficacy in their first patient, chances are they're going to use it in the second patient and the third patient. There is no lack of patients in this disease area. That's why you need more accounts to use it for the first time with this new educational support manner that we're giving, rather than just saying, "Good luck-
Yeah
-to you. That's kind of really, really important for us. We monitor that, like, where are those patients starting for the first time? Have we visited them? So we have a lot of robust analytics behind it that we use to really guide our efforts there. But then, of course, you're going to have some of those, especially the larger volume accounts that we've been targeting in the last six to nine months, community-wise, seeing some of that repeat as well. So, I would say for next several quarters, it's probably going to be a combination of both, and that is totally fine with us. Once we get to a place where it's really mature, then that's where we would further slice and dice. By this point, we have tremendous opportunity in both levers from that side.
Okay. I know you're labeled for frontline use in high serum EPO patients who are ESA ineligible, presumably also luspatercept ineligible. Do you see any frontline use happening in non-ESA high, non-serum EPO high patients? Are some of these frontline patients presenting with just such high transfusion burden that a prescriber knows off the bat, luspatercept's not going to work here, and ESA is not going to work here?
Yeah, maybe Joe, you want to comment on that since you have
Yeah, I mean, anecdotally, Stephen, what we've seen and what we've heard from prominent KOLs is that for the RS-negative population, for example, some of them are actually shifting to a direct first-line utilization for imetelstat, understanding that luspatercept is not as effective in the RS-negative group. Same with the ESAs. Some patients come in with a high transfusion burden as well, and those also do not benefit from ESAs or luspatercept as much. So those are the two groups, RS-negative being a large one, actually. So, we're seeing some of that as well.
Okay. Interesting. Maybe just kind of last U.S.-focused commercial question. What level of granularity do you have just on kind of like the phenotype of what a second-line patient looks like? Do you know if this is skewed towards RS negativity? Do you know if these are patients who have primarily seen luspatercept in frontline? What does that typical second-line patient that you're gaining traction in look like?
Yeah, I mean, more and more we're seeing patients who come off from luspatercept , and then they need another alternative. That's kind of where the market has evolved in a way where we like the fact that luspatercept has better data than ESA in the frontline setting. That's great for patients, and to be honest, great for us as well, because ultimately, what are they going to go on afterwards? On top of that, as you know, the recent NCCN guidelines that put us as a very clear preferred second-line agent ahead of HMAs. That's one area that we've been also focusing on is, doctor, really making sure that you expose your patient to RYTELO before you try to nuke their bone marrow with an HMA. That option will always be there for you in the future, and that's important.
So that kind of sequence in terms of more and more exposure in luspatercept for the first line, and then moving into RYTELO in the second line, in line with the update with the NCCN guidance as well. That's kind of what we're seeing more and more happen.
Okay.
Yeah, as luspatercept is displacing ESAs in the first line, we're seeing two dynamics. Either patients are not tolerating luspatercept, fatigue being a major factor there, and serum EPO going up post-ESA, which makes them ineligible to ESA. As luspatercept gains more ground, that also creates more space for imetelstat.
Okay. I know that there had been a lot of discussion regarding how are you going to go about trying to commercialize Europe. I think the drug's been approved there now for about a year and a half.
Year and a half, yeah.
You just announced you're going to be pursuing kind of this gated launch strategy, I think Germany before year end, and then maybe France at some point.
Yep.
Next year. Can you just kind of give us a quick overview of what that process is going to look like structurally, right? Like, how many folks are you going to need to have on the ground there in order to effectively launch this thing, and what should the expected impact to SG&A look like?
Yeah, no, good question. We're very excited about our translation of our ex-US strategy into action. If you think about any typical U.S. biotech that has global rights for its assets, what do they do? It's either full-on partnership from day one, it's like, "Good luck, you deal with it." Or some of the larger ones, they've gone on and established their own operations in France, Germany, and all these companies. We have right out from the get-go said that we don't want to be doing our own operations in every major, I mean, that's just not for us. At the same time, we have significant knowledge, expertise, and connectivity with European markets, especially in our management team, myself included, but not only me, multiple people in our executive leadership team has that. We're pursuing a hybrid model in between.
What I mean by hybrid is, ultimately, what really matters in Europe, identifying the patients that we can help and the premium that we can command for the innovation that we are bringing to the marketplace. The second bucket is probably the one that is the most important. Because the first bucket, we have a lot of these physicians who are part of IMerge. We have a lot of connectivity with the physicians in Europe. We have a lot of goodwill with them, but we need to make sure that the pricing piece is done right. So that is where we have focused in the last year, like in 2026, on making sure we are advancing the pricing dossiers.
Because to negotiate any of these pricing with the payers, you really need to build a whole value dossier that comes before that, and that takes about a good nine to 12 months. So, why would we not do that in anticipation of a potential pricing engagement? A lot of companies were not doing that because of MFN, and I get it.
The last thing we want to do is also impact negatively our value proposition in the U.S. At the same time, MFN was going to get clarified with time, and that is why we have chosen a gated commercialization strategy to say, "Let us advance the pricing component, and then we see." If it now does not work, then we can pull the plug, no harm, no foul. But in a way, what has happened recently is as we advanced our preparations, then we get more clarity on the MFN in terms of, as an example, orphan drug status is exempt. Well, we have one of those.
So, that means we are exempt. Okay, we have to worry about the normal business aspects of things. So that is why we are in a position where last week we have announced that we are going to be in a position before end of the year to actually do a commercial sale in Germany. That would mean that there will be a visible price. It will be the pre-AMNOG negotiated price, but it usually gives you a good perspective of how we look at value, and we will do that in Germany.
We are doing all this while maintaining our flexibility to do partnerships from a commercialization perspective. That is not off the table, but what we are not doing is just sitting and waiting and not leveraging fully the value that we can develop in Europe by pursuing a premium pricing strategy in line with the innovation that we are bringing.
Okay. Yeah, I know Germany is pretty unique, right, in the sense that you can price freely, right? You then have to kind of go through this benefit assessment with AMNOG and-
Correct.
-IQWiG. But I think there's also kind of a little bit of a carve-out that exists in Germany as well, whereby if you do have orphan drug designation, which is what you have-
Yes. We're only starting phase positive.
Correct me if I am wrong, right? It seems that if your sales are below this EUR 30 million threshold, then you are kind of insulated from that benefit assessment. Is that the right way to think about it?
Mostly. We always say they have a path to pay for innovation, especially in orphan diseases, areas where there is a need for that innovation to happen. We fall, according to our assessment, in line with that. That is why we have chosen Germany. One is, it is a very good European market to start with, but also Germany is a reference country from a pricing perspective for other markets as well.
As we have our aspiration to make RYTELO available everywhere, what we have always maintained is we do not need to be everywhere in the world. RYTELO needs to be everywhere in the world helping patients. For that to happen, we are preparing the infrastructure for that vision to be translated into reality, starting with simple things such as, how would you even sell? How would you expense? How would you ship drugs? A lot of work that is very normal for larger pharma companies. These are some of the things that we had to put in place in a very cost-effective manner while reducing our OpEx this year by another $10 million.
Yeah.
Right? That is the part where you look at it and you say, "Yes, will there be some more SG&A next year?" Probably. But we have also demonstrated our financial discipline in terms of if something goes up, something has to come down. Our top 10 list is always top 10, it is not 15. If something is more important, we got to kind of park certain things on one side. That discipline that we have demonstrated over the last four quarters will continue. It is something that we do while expanding the opportunity for patients to benefit more from RYTELO around the world.
Okay. You talked about the familiarity you have on an executive level with the way things work in Europe. Maybe you can speak to the differences of how low-risk MDS is actually treated in Europe versus the U.S., and why those differences might actually-
[Matthew].
-also be a little bit of a tailwind for you guys.
Yeah. Joe, do you want to tackle that?
Yeah. Let's start, Stephen, by the facts that IMerge patients were mainly recruited in Europe.
We have hands-on experience and advocacy from the KOL. Germany tends to be similar to the U.S. in the sense that it is a distributed patient population between private practice as well as academic centers. France is more of centers of excellence, hematology-driven. Those are the two opposing models in Europe. Some countries fall in either of these models. It is an aging population. The population of Europe is in line, if not bigger than the U.S. So, there is also a market size that is significant in Europe as well. There is also another aspect of the intervention is earlier in Europe.
You have patients in the wait and see in America, where in Europe, the early intervention is adopted as well.
Okay.
You have patients in healthier stage coming into first, second, and third line.
The last piece I will complement is, HMA utilization as well is lower in MDS. The practice of just buying in bulk across different diseases, that is not typically a thing in Germany. There are a few different things that we can really look at and say, "Oh, this is going to be worth it.
Okay. I know you provided revenue guidance for this year, kind of early-
First day of JP Morgan, yep.
-in 2026.
I'm guessing you're going to provide guidance in probably a similar manner for next year. Would that guidance not include or not contemplate anything Europe-related, or would you just kind of pin that guidance to U.S. only?
Yeah, we're finalizing our plans, Steve, in terms of when do we provide guidance and all that good stuff. We did provide it this year for the first time, in the beginning of January, and we've stayed consistent after that, in terms of reporting on our execution versus that guidance. We continue to be on the net revenue mid to high end of that guidance while we continue to reduce our OpEx as well. Yeah, we'll see. We'll probably provide guidance at one point as well, because we do see growth opportunity for RYTELO for many years to go.
We're quite excited about that. While on the OpEx side, we have a pretty decent team in place. Yes, there will be certain things, ups and downs, but generally speaking, we're in a good shape from an OpEx perspective. So yeah, stay tuned on that area.
Okay. I know you discontinued the phase III IMpactMF trial, a few weeks ago. I don't think there's any need to relitigate any of that. But can you just now speak to how you're thinking about the development of imetelstat and additional indications going forward?
Yeah, I would say, look, that was unfortunate when every time we have a phase III that's negative, or is not going to show demonstrable efficacy, that's not a good day. At the same time, I'd rather know now rather than in another couple of years and another $15 million-$20 million in. In some ways, it makes our story even more focused than before. Grow the base business, look at expanding ex-U.S. for RYTELO, not necessarily for the company, and then BD.
Yeah.
What really that shifts for us is two things. One is continue a lot of those IST conversations that we're having, and we're presenting some of those ideas at ASH in a few weeks, on RYTELO itself. Then really take a look at as well, how can we supplement RYTELO and build the company beyond that as well, in pursuit of deals as well.
Okay.
That becomes more of in the limelight.
Yeah, the BD side of it is interesting, right? Because I would imagine you now probably can look at things with a lot more clarity-
Clarity
with that in the rearview mirror.
Yes.
What is the level of urgency within the company on the BD side, and I guess how would you maybe just broadly characterize the opportunities that you are looking at right now?
Yeah, the way we characterize it is we are hungry but not desperate, right? We have a base business that is going to grow. This year, $230 million-$240 million in terms of net revenue, and we are saying we see growth over multiple years. That is a pretty good starting point.
Our financial discipline in a way where we put ourselves where we do not need cash in the foreseeable future. We can fund our operations. There is a lot of goodwill of folks who kind of look at our platform and say, "Okay, you have a growing platform. That is good." Then, we hired our CBO now. It has been a couple of months, very active, hit the ground running. We are retooling ourselves so that we can actually do diligence and things of that nature. Really, for us, what would make sense is something which is more advanced stage or even commercial stage. We build a very effective team in the marketplace in terms of community-based. So, it can be a hematology asset, it can be an oncology asset, because they are all community-based, right?
In the community, there is really no difference. Can we put another product in the same bag of those reps? We are doing well on RYTELO and also something else as well. This is something that we are starting now, and we are going to be increasing our focus on that. In some ways, it is much clearer than we have ever had before.
Okay.
Yeah.
Maybe just last question. I know you just flipped the P&L to profitability this past quarter. Does that make it philosophically a little bit harder to do a near-term transaction which might reset that model a little bit in terms of path to profitability? Or is the ability to provide investors with kind of the answer to the what's next question, is that more important?
I would say the latter, Steve. For us, as we internally joke about it, we celebrated for two minutes. After 30 years of turning it into a profitability, that's a good thing. To be honest, that's not our super main focus. Our focus is on building a company, leveraging RYTELO in MDS, providing additional opportunities ex-US and monetizing that, and then focusing on BD as well. For the operations, we're in good shape from a cash perspective. But of course, building a company as well takes some dough about that. So that's our focus area. But we definitely see a path to profitability, as we've demonstrated it can happen. Next year, if we follow the logic of continuous growth while on the OpEx side, kind of being efficient and lean and mean as we've demonstrated, we believe we're on the right track on the short term.
With BD, that would be the health of the company on the longer term.
All right.
Yeah.
I know we're a few minutes over time, but Harout, Joseph, really appreciate it. Thank you guys.
Thank you.
Thank you very much.
Thanks, everyone.
Appreciate it. Thank you.